Memoir of my Empower "Financial Advisor" call

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letahl
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Memoir of my Empower "Financial Advisor" call

Post by letahl »

I put all my stuff into Empower when Mint went extinct. They offered me a financial advisor call. I thought, well, don't be close minded, they sold it as like a free advice or assessment or something. I was like who knows they might have something to tell me! I believe they indicated they would be going over my retirement goals and progress. Sure, why not.

I just had the call. Mainly he asked me questions that didn't make much sense. I explained that I like my two-fund approach (VTSAX/VBTLX) because it's simple and easy, and I only have to re-allocate once a year or consider it when I make contributions. I told him I don't believe I can beat the market and even if I did, I'm conservative and this is fine. I do consider tax advantaged aspects, but probably don't get that part perfect, but also think it might be six of one half dozen of the other.

He told me that my portfolio wasn't diversified. ME: "What, sir? Are you saying the entire stock market isn't diversified?" HIM: "Yes, saying its diversified because it's a fund is a cop out."

He explained to me that my portfolio is not consistent with modern investment theory. I told him that I like things simple and easy - is he proposing I do things less simply and less easily in favor of higher returns? He said actually, no, the returns aren't higher, but it's less risky. ME: "I thought my bond allocation was designed to mitigate risk?" HIM: "Well I guess that's *one* way to look at it." (In that voice like I'm wrong.)

Despite my insistence that I did not want to make things complicated, he kept suggesting I "get into the weeds" with the data to prove modern investment theory would be better for me than the Boglehead approach. (In what way? I never could tell.) He told me the Boglehead approach is for young investors with $70-80k in stock, not for investors with more money. I told him that doesn't seem to be the case in my limited experience, so I was surprised to hear him say that. He was hung up on Bogleheads not being "investment professionals," and said any Boglehead claims of portfolio size are unverified and therefore dubious. I remained open to any helpful suggestions or insight, but perceived none.

I will leave you with my favorite. He told me that I had too much in tech (29%) and too little in energy (4%). I told him, that's not me, that's what the market has in those sectors. He said well that's inefficient because sure tech has done well in the past but who knows about the future, and look you are missing out on gains in healthcare. ME: "Who decides I should have 10% in energy sector instead of the 4.27% in line with market?" HIM: "I'm gonna flip the question back on you - who decides you SHOULDN'T?" ME: "That's not helpful."

By the end of the call when it had become apparent that I wasn't a flopping fish who needed to be saved from my own investment misery, he resorted to trying to sell me product "because I had never consulted with an investment professional." So hammered that. I asked him if the cost would be that my process become LESS simple and LESS easy and LESS conservative, because I really am not even trying to trade those for higher returns, not that he was suggesting they'd be higher returns. He said yes, but it would be more diversified and efficient and professional.

He wouldn't fully say that the market is inefficient and that he was proposing trying to take advantage of those inefficiencies in an effort to beat the market. I couldn't really find a discernible thesis, other than I should buy their consultation services since I'd never consulted a professional and the entire stock market is "not diverse."

I really was open minded, but I got nothing of value from the call that I can discern. It was a waste of time, sales only - no personal value or insight as promised. Perhaps the reminder of how it could be, if I wasn't fully sold on the BG approach. I do still love Empower as a free service, however, and it is even better than Mint was.

What do we think about this approach - tickering with the allocations because the WHOLE STOCK MARKET apparently is "not diverse" and doesn't take advantage of growth opportunities? It sounded like utter bullocks to me, but I'm open to hearing someone better articulated explain whether there might be a good reason to raise my energy sector holding or lower my tech sector holding, at the expense of sleeping well through every night.
Last edited by letahl on Thu May 09, 2024 12:34 pm, edited 2 times in total.
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Stinky
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Re: Memoir of my Empower "Financial Advisor" call

Post by Stinky »

letahl wrote: Thu May 09, 2024 10:57 am I really was open minded, but I got nothing of value from the call that I can discern. It was a waste of time, sales only - no personal value or insight as promised. Perhaps the reminder of how it could be, if I wasn't fully sold on the BG approach. I do still love Empower as a free service, however, and it is even better than Mint was.

What do we think about this approach - tickering with the allocations because the WHOLE STOCK MARKET apparently is "not diverse" and doesn't take advantage of growth opportunities? It sounded like utter bullocks to me, but I'm open to hearing someone better articulated explain whether there might be a good reason to raise my energy sector holding or lower my tech sector holding, at the expense of sleep well through every night.
It sounds to me like you defended Boglehead principles pretty well, in the face of some withering incoming fire!

And, of course, you're right and he's not.

Now, I have a question for you. I'm not familiar with Empower, but it sounds like this was a "free consultation". If you had expressed your interest in following his approach, would he have tried to sell you a service that would have cost you some money? And, if so, do you know how much it would have cost you?

You did just fine on the call. Thanks for posting your experience.
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niagara_guy
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Re: Memoir of my Empower "Financial Advisor" call

Post by niagara_guy »

Evidently Empower used to be Great West Life.
calwatch
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Re: Memoir of my Empower "Financial Advisor" call

Post by calwatch »

Empower also manages tons of 401(k)s and 457's. I've been with them for 20 years and never gotten a sales call from them, but that may be the employer not allowing that. The choices of funds are the usual target date, actively managed broad sector funds (small cap, mid cap, bond, international, etc.), and a separately managed S&P 500 fund with one basis point of expenses.
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Re: Memoir of my Empower "Financial Advisor" call

Post by arcticpineapplecorp. »

"it's difficult to get a man to understand something when his salary depends upon his not understanding it." - Upton Sinclair
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GP813
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Re: Memoir of my Empower "Financial Advisor" call

Post by GP813 »

I would bet you get better returns, tax treatment, and lower expenses than whatever scheme he was trying to place you in.
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Re: Memoir of my Empower "Financial Advisor" call

Post by airshow »

Have them for my 401k, and they offer a handful of decent funds. However, I'm able to use the 59-1/2 transfer rule to my ira every year or two. I just drip into one cheap index fund and wait for the next transfer.

Never sought their advice and reading this, plus a co-workers plan laid out by one of their advisors(something like 13+ funds), will keep me from never dialing their advisor line.
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Re: Memoir of my Empower "Financial Advisor" call

Post by nisiprius »

Hopefully, "He explained to me that my portfolio is not consistent with modern investment theory" means that he's a devotee of factor investing and nothing worse.

The trouble with interactions like this, for me, is that I always come out of them feeling a) lousy and b) insecure, even if I'm sure it's all nonsense (i.e. irrelevant, hyped, unimportant) and self-serving.
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letahl
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Re: Memoir of my Empower "Financial Advisor" call

Post by letahl »

Stinky wrote: Thu May 09, 2024 11:12 am
letahl wrote: Thu May 09, 2024 10:57 am I really was open minded, but I got nothing of value from the call that I can discern. It was a waste of time, sales only - no personal value or insight as promised. Perhaps the reminder of how it could be, if I wasn't fully sold on the BG approach. I do still love Empower as a free service, however, and it is even better than Mint was.

What do we think about this approach - tickering with the allocations because the WHOLE STOCK MARKET apparently is "not diverse" and doesn't take advantage of growth opportunities? It sounded like utter bullocks to me, but I'm open to hearing someone better articulated explain whether there might be a good reason to raise my energy sector holding or lower my tech sector holding, at the expense of sleep well through every night.
It sounds to me like you defended Boglehead principles pretty well, in the face of some withering incoming fire!

And, of course, you're right and he's not.

Now, I have a question for you. I'm not familiar with Empower, but it sounds like this was a "free consultation". If you had expressed your interest in following his approach, would he have tried to sell you a service that would have cost you some money? And, if so, do you know how much it would have cost you?

You did just fine on the call. Thanks for posting your experience.
I am sure it would have cost money, but he said he was going to send me the information and just didn't bother. I told him I'd look over anything he sent me. He kept saying I should speak with a "financial advisor" (and I was thinking - Wait - I was told YOU are a financial advisor, aren't we talking now?!) I searched the forum after the call and from what I discerned in a brief survey, they charge a percentage of your portfolio and FULLY MANAGE it for you. But let me tell ya, I AM NOT THAT KIND OF GIRL, SIR.
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letahl
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Re: Memoir of my Empower "Financial Advisor" call

Post by letahl »

nisiprius wrote: Thu May 09, 2024 12:25 pm Hopefully, "He explained to me that my portfolio is not consistent with modern investment theory" means that he's a devotee of factor investing and nothing worse.

The trouble with interactions like this, for me, is that I always come out of them feeling a) lousy and b) insecure, even if I'm sure it's all nonsense (i.e. irrelevant, hyped, unimportant) and self-serving.
Meh, I didn't take it personally. Only in part because it sounded like he was younger than me, not quite as clever, and didn't seem to know what we were doing on the call.

I think fundamentally they want me to hold a bunch of stocks/funds, and for me to pay them for that service of deciding what they are, when I am already VERY HAPPY with the two-fund portfolio and Boglehead approach. He asked me what the reason would be I would switch to another approach. What? I'm like, Sir, I have chosen this approach because I haven't observed a better one. Therefore I cannot give you the answer as to WHY I would change approaches - that is something you would have to tell me - and it would require the new approach being even EASIER and even SIMPLER than the one I use now. He kind of mumbled on to something else, and talked about the emotional load of managing one's own portfolio.
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Re: Memoir of my Empower "Financial Advisor" call

Post by GP813 »

Once they charge around 1% of your portfolio for AUM, it becomes very hard for them to beat what you could do yourself.

I wish I had the discipline to just be a one fund investor but I don't, I need my individual stocks, and different index funds. If I was starting from zero I would "one fund it". Mike Piper writes about this. Simplicity is the best. Bogleheads 3 fund is fine but I advise my younger family members to just use one fund or a target date retirement fund I am starting to believe these are even better for most people, especially in a retirement account.
Last edited by GP813 on Thu May 09, 2024 1:42 pm, edited 1 time in total.
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Charles Joseph
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Re: Memoir of my Empower "Financial Advisor" call

Post by Charles Joseph »

Good job. It just feels like nearly everyone in the investment industry is out to pick your pocket (the universal "you").
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Re: Memoir of my Empower "Financial Advisor" call

Post by livesoft »

nisiprius wrote: Thu May 09, 2024 12:25 pmThe trouble with interactions like this, for me, is that I always come out of them feeling a) lousy and b) insecure, even if I'm sure it's all nonsense (i.e. irrelevant, hyped, unimportant) and self-serving.
That's too bad that you feel this way. You may not like it, but I always offer to manage the caller's personal portfolio for a small fee. It empowers me to do so and I always feel pretty good after such interactions.
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Re: Memoir of my Empower "Financial Advisor" call

Post by Normchad »

This is why I refuse to w en have a conversation with these types of people. If they call youu, or initiate the interaction, they’re salespeople. Plain and simple. We should stop calling them “investment advisors”. Just like we don’t call insurance salesmen “life coaches”.

They scam and screw so many uniformed people,especially the elderly. Just terrible.

For those that want or need financial advice, do your homework, find somebody that isn’t a salesman, and you make the first call.
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Re: Memoir of my Empower "Financial Advisor" call

Post by AlwaysLearningMore »

You more than held your own, and stuck to your principles. :beer
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Re: Memoir of my Empower "Financial Advisor" call

Post by barnaclebob »

There are tons of people out there that do feel like flapping fish out of water. They know they need to do something, they want to do something, they can afford to do something but they don't know what. Its those people that these salespeople are looking for. Most of them will accept the first person who holds out a hand to help not knowing its a hand looking for a fat chunk of money too.
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Re: Memoir of my Empower "Financial Advisor" call

Post by popoki »

For a number of reasons, I transferred my Empower 401k & 457 to IRAs at Vanguard as soon as I retired.
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Re: Memoir of my Empower "Financial Advisor" call

Post by solaris17 »

livesoft wrote: Thu May 09, 2024 1:17 pm
nisiprius wrote: Thu May 09, 2024 12:25 pmThe trouble with interactions like this, for me, is that I always come out of them feeling a) lousy and b) insecure, even if I'm sure it's all nonsense (i.e. irrelevant, hyped, unimportant) and self-serving.
That's too bad that you feel this way. You may not like it, but I always offer to manage the caller's personal portfolio for a small fee. It empowers me to do so and I always feel pretty good after such interactions.

Livesoft, your post made my day :D
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Re: Memoir of my Empower "Financial Advisor" call

Post by er999 »

letahl wrote: Thu May 09, 2024 10:57 am I
Despite my insistence that I did not want to make things complicated, he kept suggesting I "get into the weeds" with the data to prove modern investment theory would be better for me than the Boglehead approach. (In what way? I never could tell.) He told me the Boglehead approach is for young investors with $70-80k in stock, not for investors with more money. I told him that doesn't seem to be the case in my limited experience, so I was surprised to hear him say that. He was hung up on Bogleheads not being "investment professionals," and said any Boglehead claims of portfolio size are unverified and therefore dubious. I remained open to any helpful suggestions or insight, but perceived none.

It seems like a classic sales tactic — make you feel you are getting a special item that is reserved for the select few.

However, the argument against only VTSAX/VBTLX (US total stock market and total bond market, for those like me who had to look up the symbols) has been made on bogleheads. Many on here (although not Jack Bogle) would recommend some international. Total international adds 8627 stocks. More controversially some would recommend a value tilt.

That said, your choice of US total stock market has been way superior to anyone who added international or a value tilt in the last 10 years to the stock portion of their portfolio.
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Re: Memoir of my Empower "Financial Advisor" call

Post by Rocinante Rider »

Thanks for sharing. Unless you find investment discussions with salespeople amusing, there's nothing to be gained from them, and much potentially to be lost by gullible or uninformed clients.

I used to have a 457b at Empower, and I don't miss their fees or sales pitches since I rolled it over into a Vanguard IRA. I still have substantial 403b assets with Fidelity. Except for my annual RMD in Fidelity's money market, all of my money at Fidelity is in Vanguard S&P 500, Extended Mkt, Int'l Stock, and Total Bond funds. During a recent phone call the Fidelity rep made an unsolicited recommendation that I use their advisor services because they could do much better than my Vanguard holdings. I asked how they would do this and he replied that they would put me into actively managed funds and individual stocks that could beat the returns of the index funds. I'm utterly confident that his approach would almost certainly underperform, and I'm utterly certain that there was nothing I could say that would lead him to acknowledge that (see @articpineapplecorp for Upton Sinclair's quote). Because I wasn't in need of an amusing or diverting conversation at that moment, I just thanked the rep for his suggestion and said that I was very happy with my investments as they stood.
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Re: Memoir of my Empower "Financial Advisor" call

Post by AlwaysLearningMore »

er999 wrote: Thu May 09, 2024 1:44 pm
letahl wrote: Thu May 09, 2024 10:57 am I
Despite my insistence that I did not want to make things complicated, he kept suggesting I "get into the weeds" with the data to prove modern investment theory would be better for me than the Boglehead approach. (In what way? I never could tell.) He told me the Boglehead approach is for young investors with $70-80k in stock, not for investors with more money. I told him that doesn't seem to be the case in my limited experience, so I was surprised to hear him say that. He was hung up on Bogleheads not being "investment professionals," and said any Boglehead claims of portfolio size are unverified and therefore dubious. I remained open to any helpful suggestions or insight, but perceived none.

It seems like a classic sales tactic — make you feel you are getting a special item that is reserved for the select few.

However, the argument against only VTSAX/VBTLX (US total stock market and total bond market, for those like me who had to look up the symbols) has been made on bogleheads. Many on here (although not Jack Bogle) would recommend some international. Total international adds 8627 stocks. More controversially some would recommend a value tilt.

That said, your choice of US total stock market has been way superior to anyone who added international or a value tilt in the last 10 years to the stock portion of their portfolio.
OP seems satisfied with their portfolio. It's unlikely to be a catastrophic financial mistake.
nisiprius wrote: Fri Sep 08, 2023 8:50 pm
welderwannabe wrote: Fri Sep 08, 2023 8:37 pm
nisiprius wrote: Fri Sep 08, 2023 3:45 pm This is pretty startling. To be clear, I used the built-in portfolio definitions available in PortfolioVisualizer, and, for whatever reason, their source for Paul Merriman's "FundAdvice Ultimate Buy-and-hold Portfolio" uses the EVF ETF, which had inception in late 2005 which had the effect of defining the starting point for the comparison.
International stocks have 'underperformed' now for several decades, and thats probably part of the reason the VG Balanced has outperformed those 3 other portfolios.
There's always an alibi.

I'm not saying VBIAX is always going to beat everything else. I'm saying it's a perfect credible, perfectly reasonable choice, and the reason you don't hear much about it is not that there's some awful flaw in it, it's for other reasons.

We can toss out the Paul Merriman portfolio--one of the problems, by the way, is that the more sophisticated the portfolio is, the more likely it is to depend on investment choices that haven't existed for very long--and, to reduce clutter, the the Vanguard LifeStrategy fund--and just compare Balanced Index to the Bill Schultheis Coffeehouse portfolio. The Coffeehouse portfolio is a typical example of the factor genre, and includes the frequently-recommended REIT overweight, small-cap value overweight, and (mild) globalization. And it takes us back to 1998 and thus includes the great shining moment for small-cap value, 2000-2003, and the great shining moment for international stocks, 2002-2007.

Source

Image

It no longer looks so one-sided. In fact it's a tie. (It would be a technicality to mention that Balanced Index still outperformed by microscopic amounts in return and in risk-adjusted return). Admittedly, it's an interesting psychological question how one would have felt, holding Balanced Index for the first half of the time period... or the Coffeehouse Portfolio for the second half.

I still maintain that Balanced Index is a perfectly reasonable, perfectly credible choice for an all-in-one portfolio. It doesn't suck. Not only could you do worse, it's surprisingly easy to do worse.
Kudos to OP for sales resistance. 👍
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Re: Memoir of my Empower "Financial Advisor" call

Post by hnd »

These types of conversations are fun for me. So when he says modern investment theory, he's likely talking about MPT. the problem is there is no one agreed upon theory of modern portfolio construction. So I usually say thing like this:

"how do you define modern portfolio theory?"

"burton Malkiel says we should have a linear combination of the broad market and govt bonds, Fama and French argue market indexes and corporate bonds, graham said buy value stocks and corporate bonds, which one do you adhere too? or is there some other definition considering there are like hundreds?"

"Benoit Mandelbrot has shown that Market returns do not follow a normal distribution and MPT ignores the tales of distributions, how does your definition deal with this?"

almost every purported solution is hold stocks and bonds. you do that in the most cost efficient way. could you be holding more risk than I have an appetite for? WHO KNOWS...empower financial consultant probably doesn't, and their risk assessment will barely get me there either.

My probability and statistics/investments professor always said whether right or wrong "is risk actually risk if i don't understand risk?" he referred to a person who walks a small walkway and either side of the walkway is completely covered. when they get across the coverings are removed and it was a small walkway over a giant cavern. He argued most people aren't risky enough. insurance companies think everything is too risky.
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Re: Memoir of my Empower "Financial Advisor" call

Post by sleepysurf »

Empower is apparently the second largest Retirement Plan provider in the U.S., but they also manage individual portfolios, since acquiring Personal Capital in 2020.

The OP (migrating from Mint), apparently entered (or linked) all his accounts to the FREE version of Empower Personal Dashboard (formerly Personal Capital). Doing so will generate a phone call (or two), from one of their advisors, offering to manage the portfolio for you, with the following fee structure...
Managed Assets Annual Fee
Over $100,000 0.89%
Over $1 Million 0.79% to 0.49%
As a long time user (when it was originally Personal Capital), I have found their FREE app to be extremely useful for tracking expenses, analyzing my overall asset allocation (which automatically compares it to their recommended allocation), and running retirement projections. The few times one of their advisors called me, I told them I'm a DIY Boglehead, and not interested in their advisory services. They've never called me since.

Of note, their recommended allocations (at least for their "Balanced" portfolio option) are somewhat similar to Vanguards PAS, also including a slice of Int'l Bonds. However, they also recommend ~10% allocated to REIT's and Commodities.

I never discussed my portfolio with any of their advisors, but I think they do act as fiduciaries if you sign up for their advisory service. Non DIY'ers could probably do a lot worse than using their full advisory service.
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Re: Memoir of my Empower "Financial Advisor" call

Post by esteen »

Stinky wrote: Thu May 09, 2024 11:12 am
letahl wrote: Thu May 09, 2024 10:57 am I really was open minded, but I got nothing of value from the call that I can discern. It was a waste of time, sales only - no personal value or insight as promised. Perhaps the reminder of how it could be, if I wasn't fully sold on the BG approach. I do still love Empower as a free service, however, and it is even better than Mint was.

What do we think about this approach - tickering with the allocations because the WHOLE STOCK MARKET apparently is "not diverse" and doesn't take advantage of growth opportunities? It sounded like utter bullocks to me, but I'm open to hearing someone better articulated explain whether there might be a good reason to raise my energy sector holding or lower my tech sector holding, at the expense of sleep well through every night.
It sounds to me like you defended Boglehead principles pretty well, in the face of some withering incoming fire!

And, of course, you're right and he's not.

Now, I have a question for you. I'm not familiar with Empower, but it sounds like this was a "free consultation". If you had expressed your interest in following his approach, would he have tried to sell you a service that would have cost you some money? And, if so, do you know how much it would have cost you?

You did just fine on the call. Thanks for posting your experience.
This was a great read - thanks for posting OP!

They definitely are trying to sell you AUM investment management. Basically, they use an equal sector weighting approach instead of a cap-weighted approach to diversify across equities. And because of the price, it's definitely not worth it.

I always had a wonder if you took costs out of it (i.e. this is purely hypothetical, and not a real-life decision): would equal sector weightings outperform cap weightings? Theoretically, one holds a greater percentage of a recently successful stock or sector in a cap-weighted portfolio than in a equal sector weighted portfolio. And if reversion to the mean is real, that would reduce the expected future returns of the cap-weighted portfolio relative to the equal sector portfolio. I actually posted a question about that here a couple months ago. But this is only theory, and what I've come to understand from other attempts at equal-weighting it doesn't pan out in reality. And that's BEFORE fees. There's no way I'd have Empower charge me to run that experiment.

AUM fees to manage active bets remind me of one of my favorite Bogle quotes: " what happens in the [active management] fund business is that the magic of compound returns is overwhelmed by the tyranny of compounding costs."
Last edited by esteen on Thu May 09, 2024 2:49 pm, edited 1 time in total.
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JBTX
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Re: Memoir of my Empower "Financial Advisor" call

Post by JBTX »

livesoft wrote: Thu May 09, 2024 1:17 pm
nisiprius wrote: Thu May 09, 2024 12:25 pmThe trouble with interactions like this, for me, is that I always come out of them feeling a) lousy and b) insecure, even if I'm sure it's all nonsense (i.e. irrelevant, hyped, unimportant) and self-serving.
That's too bad that you feel this way. You may not like it, but I always offer to manage the caller's personal portfolio for a small fee. It empowers me to do so and I always feel pretty good after such interactions.
Well played.
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Re: Memoir of my Empower "Financial Advisor" call

Post by rockstar »

Their job is to maximize their sales revenue, not maximize your risk adjusted returns.

My problem now is that I consider them all awful that I don’t even want do a call with one.
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Re: Memoir of my Empower "Financial Advisor" call

Post by sunrider6 »

I had a similar experience a few months ago when I switched after mint shut down.

My most charitable read is that empower provides:

1. a direct indexing service which likely improves tax loss harvesting for a couple years or while accumulating - but what they don’t tell you is that eventually the TLH opportunities go away and you have loads of LT Cap Gains to manage but the fees remain.

2. an equal weighting strategy vs market cap weighting. They seem to think this improves sharpe ratio and have some cherry picked periods of time where this was the case. (I don’t buy it as better, but don’t think it’s the worst thing ever).

3. They also advocate for alternatives (which they classify as REIT, precious metals, and commodities) and provide some data that for some window of time, there was slight negative correlation between these alternatives and equities. I don’t buy that this will always be the case, but again a small allocation to alternatives is not unheard of.

3. Their advice on tax efficient location is good (that’s to say it’s standard BH).

4. And in theory they offer (all included) access to a number of specialist advisors for things like 529, when take SS and any other set of financial questions. No idea how good these are.

They do this for .89% AUM at least for the first 7 figures of so.

I have a TSP account which has about 40% of my assets and they offered to provide some general advice for free (without counting that as part of the AUM). Although I’m sure the advice would have been blah, the fact that they did not tell me to roll it over to their platform actually improved my impression of them a bit.

At the time, I was using Schwab SIP for a portion of the portfolio and much of the discussion was why Schwab SIP was bad. Ironically the discussion with the empower ‘advisor’ was what convinced me to move things around and do a full BH approach myself.

Needless to say I declined the “offer,” but my impression is that it’s certainly not just a scam.
esteen
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Re: Memoir of my Empower "Financial Advisor" call

Post by esteen »

sleepysurf wrote: Thu May 09, 2024 2:21 pm
As a long time user (when it was originally Personal Capital), I have found their FREE app to be extremely useful for tracking expenses, analyzing my overall asset allocation (which automatically compares it to their recommended allocation), and running retirement projections. The few times one of their advisors called me, I told them I'm a DIY Boglehead, and not interested in their advisory services. They've never called me since.
+1. That's exactly what i did. And I still use their free platform to this day - it's a great account aggregator. It also is the only free one I've seen that automatically calculates your overall expense ratio.

And it's not a scam. Not any more than other AUM advisory services (and probably less than most). But I'm guessing most folks who regularly attend this forum would not find their services helpful.
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McDougal
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Re: Memoir of my Empower "Financial Advisor" call

Post by McDougal »

letahl wrote: Thu May 09, 2024 10:57 am I was like who knows they might have something to tell sell me!
FTFY
Rajsx
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Re: Memoir of my Empower "Financial Advisor" call

Post by Rajsx »

I had a similar experience that of initial poster, I delinked my investments from the Empower & now have ONLY my banks & credit cards linked with them.
It works similar to Mint for me for following the transactions & bank totals. I use Fidelity for following my Asset Allocation & retirement projections.
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Rocinante Rider
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Re: Memoir of my Empower "Financial Advisor" call

Post by Rocinante Rider »

FYI, Vanguard Portfolio Watch also does the following, along with a lot of other functionality and a Portfolio Tester tool to see the effects of potential changes, but I'm not sure if it's free to people who do not have Vanguard accounts:
sleepysurf wrote: Thu May 09, 2024 2:21 pm I have found their FREE app to be extremely useful for...analyzing my overall asset allocation (which automatically compares it to their recommended allocation)
esteen wrote: Thu May 09, 2024 2:53 pm I still use their free platform to this day - it's a great account aggregator. It also is the only free one I've seen that automatically calculates your overall expense ratio.
exodusNH
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Re: Memoir of my Empower "Financial Advisor" call

Post by exodusNH »

Rajsx wrote: Thu May 09, 2024 3:14 pm I had a similar experience that of initial poster, I delinked my investments from the Empower & now have ONLY my banks & credit cards linked with them.
It works similar to Mint for me for following the transactions & bank totals. I use Fidelity for following my Asset Allocation & retirement projections.
I gave them a Google Voice number that I don't otherwise use (and in a different state.) I don't think I've gotten a single call from them in the few months I've had the service.

I wound up paying $50 for Monarch. I'm not sure if I'll renew next year as Empower does what I need it to do, even if I do like the interactions I've had with Monarch.

The investment analysis is MUCH better in Empower.
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Re: Memoir of my Empower "Financial Advisor" call

Post by mtwhmemn »

OP thanks for posting your experience. That was interesting. I like Empower as a free consolidation tool/portfolio allocation tool, etc.... Their "Blended" portfolio is interesting to watch in comparison to my ~ 60 Total World/ ~35 Total Bond/ ~5 Cash portfolio. My portfolio and their "Blended" portfolio run eerily in sync, but over the long term I "beat" it & that's not taking into consideration their AUM fees. If anyone knows what "Blended" is I'd like to know!
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Re: Memoir of my Empower "Financial Advisor" call

Post by trueson1 »

I use the free portfolio service to give a quick view of all my assets and do this same with Fidelity for comparison. They are both pretty close on future projections. But almost all my assets are with Vanguard. I have received a lot of calls from Fidelity but never from Empower.
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Re: Memoir of my Empower "Financial Advisor" call

Post by Jack FFR1846 »

What a clown. I do spar with clowns like this now and then and tend to wait for them to leave me an opening large enough to drive a cruise ship through. His: Health care needs more. My response would be: "you mean like Stewart Health Care who is in such dire shape in the Boston market, they appear ready to go into bankruptcy?". During his silence, I'd hang up. I'd then remove all my money from them and put it into someplace more suitable like Schwab or Fidelity. And when these clowns contact to ask why I've moved the money, I'd tell him that their clown's nonsense made it clear that I want nothing to do with them.
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sleepysurf
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Re: Memoir of my Empower "Financial Advisor" call

Post by sleepysurf »

sunrider6 wrote: Thu May 09, 2024 2:50 pm...My most charitable read is that empower provides:

1. a direct indexing service which likely improves tax loss harvesting for a couple years or while accumulating - but what they don’t tell you is that eventually the TLH opportunities go away and you have loads of LT Cap Gains to manage but the fees remain.

2. an equal weighting strategy vs market cap weighting. They seem to think this improves sharpe ratio and have some cherry picked periods of time where this was the case. (I don’t buy it as better, but don’t think it’s the worst thing ever).

3. They also advocate for alternatives (which they classify as REIT, precious metals, and commodities),,,
I'm not sure they do "Direct Indexing" per se, but their Smart Weighting™ asset allocation description
(https://www.empower.com/personal-invest ... -weighting) says they check daily for rebalancing opportunities.

I wonder if they use a basket of sub-asset class ETF's for their portfolio construction? I'm sure their "proprietary" approach is also designed to make individual accounts "sticky" and more difficult to unwind from (at least for taxable accounts) if a client wishes to leave. Perhaps somebody here has tried their Advisory service, and can give more insight into their methodology.

Interestingly, due to my modest "tilt" towards Mid/Small Caps (using Vanguard's Extended Market Index), and 6% allocation to the Vanguard REIT Index, their Investment Checkup tool projects that my returns would match their Smart Weighting™ (Alternative) allocation, with a 0.06% Annual E.R. (vs. their significantly higher AUM fee)!
HISTORICAL PERFORMANCE
Since 1992, your Current Allocation would have grown to a similar value as your Alternative allocation.
Retired 2018 | currently ~65/30/5 (partially sliced and diced, with a slowly rising equity glide path)
marcopolo
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Re: Memoir of my Empower "Financial Advisor" call

Post by marcopolo »

To be fair, what the representative was saying is not that different than what you hear on this forum quite regularly from well respected posters.

You can find MANY discussion about the lack of diversity in TSM and similar factor investing ideas here.
Once in a while you get shown the light, in the strangest of places if you look at it right.
Lastrun
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Re: Memoir of my Empower "Financial Advisor" call

Post by Lastrun »

marcopolo wrote: Thu May 09, 2024 5:32 pm To be fair, what the representative was saying is not that different than what you hear on this forum quite regularly from well respected posters.

You can find MANY discussion about the lack of diversity in TSM and similar factor investing ideas here.
I agree with you, that was my first thought when I saw the OP was holding VTSAX/VBTLX.

Saying this is not consistent with modern investment theory would not be a sales pitch.
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Re: Memoir of my Empower "Financial Advisor" call

Post by Dottie57 »

Did he ever say what “ modern investment theory” is?
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Richard1580
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Re: Memoir of my Empower "Financial Advisor" call

Post by Richard1580 »

They are not calling you up out of the goodness of their heart. They're trying to sell you a product. There is nothing wrong with that, but it would be nice if they were upfront about it.
"The quest is the quest."
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Re: Memoir of my Empower "Financial Advisor" call

Post by Dottie57 »

Dottie57 wrote: Thu May 09, 2024 5:44 pm Did he ever say what “ modern investment theory” is?
Never mind I found a post describing it.
Wannaretireearly
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Re: Memoir of my Empower "Financial Advisor" call

Post by Wannaretireearly »

livesoft wrote: Thu May 09, 2024 1:17 pm
nisiprius wrote: Thu May 09, 2024 12:25 pmThe trouble with interactions like this, for me, is that I always come out of them feeling a) lousy and b) insecure, even if I'm sure it's all nonsense (i.e. irrelevant, hyped, unimportant) and self-serving.
That's too bad that you feel this way. You may not like it, but I always offer to manage the caller's personal portfolio for a small fee. It empowers me to do so and I always feel pretty good after such interactions.
lol, you can lecture them on Really extreme day rules and how to predict next day valuations. If you partner with a Data Scientist you could become filthy rich yourself 🤣
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theRoCK
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Re: Memoir of my Empower "Financial Advisor" call

Post by theRoCK »

I had this call once with them when they were still Personal Capital. From what I remember, what they offer is a form of direct indexing, not market cap based, but equal weight on a per sector basis. They pick representative stocks in each sector, and they TLH within a sector with an equivalent stock.

I said no, thanks, and I used to get occasional emails to set up a call with the financial advisor but never bothered, and eventually it stopped.
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Re: Memoir of my Empower "Financial Advisor" call

Post by esteen »

Rocinante Rider wrote: Thu May 09, 2024 3:20 pm FYI, Vanguard Portfolio Watch also does the following, along with a lot of other functionality and a Portfolio Tester tool to see the effects of potential changes, but I'm not sure if it's free to people who do not have Vanguard accounts:
sleepysurf wrote: Thu May 09, 2024 2:21 pm I have found their FREE app to be extremely useful for...analyzing my overall asset allocation (which automatically compares it to their recommended allocation)
esteen wrote: Thu May 09, 2024 2:53 pm I still use their free platform to this day - it's a great account aggregator. It also is the only free one I've seen that automatically calculates your overall expense ratio.
Is that for only Vanguard accounts? I have IRAs at Vanguard, but retirement plans across two other custodians. Then banking with one bank and one credit union... then I-Bonds direct with the Treasury. Empower's tool allows me to aggregate the data across all these institutions.
This post is for entertainment or information only, and should not be construed as professional financial advice. | | "Invest your money passively and your time actively" -Michael LeBoeuf
esteen
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Re: Memoir of my Empower "Financial Advisor" call

Post by esteen »

Jack FFR1846 wrote: Thu May 09, 2024 5:21 pm What a clown. I do spar with clowns like this now and then and tend to wait for them to leave me an opening large enough to drive a cruise ship through. His: Health care needs more. My response would be: "you mean like Stewart Health Care who is in such dire shape in the Boston market, they appear ready to go into bankruptcy?". During his silence, I'd hang up. I'd then remove all my money from them and put it into someplace more suitable like Schwab or Fidelity. And when these clowns contact to ask why I've moved the money, I'd tell him that their clown's nonsense made it clear that I want nothing to do with them.
OP's money is not with them... he's using their free tool, and they called up to see if he WOULD put their money with them, which he declined.
This post is for entertainment or information only, and should not be construed as professional financial advice. | | "Invest your money passively and your time actively" -Michael LeBoeuf
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Re: Memoir of my Empower "Financial Advisor" call

Post by unwitting_gulag »

hnd wrote: Thu May 09, 2024 2:15 pm These types of conversations are fun for me. So when he says modern investment theory, he's likely talking about MPT. the problem is there is no one agreed upon theory of modern portfolio construction. So I usually say thing like this:

"how do you define modern portfolio theory?"

"burton Malkiel says we should have a linear combination of the broad market and govt bonds, Fama and French argue market indexes and corporate bonds, graham said buy value stocks and corporate bonds, which one do you adhere too? or is there some other definition considering there are like hundreds?"

"Benoit Mandelbrot has shown that Market returns do not follow a normal distribution and MPT ignores the tales of distributions, how does your definition deal with this?"

almost every purported solution is hold stocks and bonds. you do that in the most cost efficient way. could you be holding more risk than I have an appetite for? WHO KNOWS...empower financial consultant probably doesn't, and their risk assessment will barely get me there either.
The intrepid "advisor" could have mentioned leverage and portfolio construction using long/short methods... isn't that all the academic rage these days (or since 1970 or so?)? Instead that esteemed personage seems to only have been interested in hassling the OP.
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Re: Memoir of my Empower "Financial Advisor" call

Post by Rocinante Rider »

esteen wrote: Thu May 09, 2024 6:15 pm Is that for only Vanguard accounts? I have IRAs at Vanguard, but retirement plans across two other custodians. Then banking with one bank and one credit union... then I-Bonds direct with the Treasury. Empower's tool allows me to aggregate the data across all these institutions.
Vanguard uses Yodlee for auto tracking of outside accounts. I previously used auto-tracking at Vanguard for my Fidelity 403b account. I don't know whether you can also add and track a bank or Treasury Direct account with Yodlee. A few years ago I decided not to risk giving Yodlee my Fidelity log-in credentials. You can manually add and update as many accounts as you like, including their holdings, ticker symbols, and share amounts. I find it pretty easy to do, and everything gets analyzed with lots of detail (e.g., asset allocation, cap size, style analysis, sector analysis, detailed international analysis, total portfolio expense ratios, comparisons of everything to the overall market, etc.). The Portfolio tester tool lets me make hypothetical changes, including adding new investments, and then compare side by side the current portfolio to the proposed changes.
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Re: Memoir of my Empower "Financial Advisor" call

Post by sunrider6 »

sleepysurf wrote: Thu May 09, 2024 5:29 pm I'm not sure they do "Direct Indexing" per se, but their Smart Weighting™ asset allocation description
(https://www.empower.com/personal-invest ... -weighting) says they check daily for rebalancing opportunities.

I wonder if they use a basket of sub-asset class ETF's for their portfolio construction? I'm sure their "proprietary" approach is also designed to make individual accounts "sticky" and more difficult to unwind from (at least for taxable accounts) if a client wishes to leave. Perhaps somebody here has tried their Advisory service, and can give more insight into their methodology.
See this pdf for a reasonable detailed description of their approach.
https://www.empower.com/personal-invest ... ethodology

They depict their portfolios on page 8: “balanced” looks like 50/40 +10 alts/REIT.

My understanding that they do something like direct indexing for US equities using an equally sector weighted “index” with other rules on which individual stocks they pick as representative for a sector. I think it was ~100 or so stock for a typical (mid-high 6 figure portfolio). Good luck unwinding that if you choose to get out later…
I was told they use low cost index funds for the other asset classes (bonds, international equities) but I don’t know for sure. Nor do l know the composition of their US bonds (corporate, high yield, treasuries, TIPS, etc) And I don’t know the specific ones.
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Re: Memoir of my Empower "Financial Advisor" call

Post by hnd »

unwitting_gulag wrote: Thu May 09, 2024 6:29 pm
hnd wrote: Thu May 09, 2024 2:15 pm These types of conversations are fun for me. So when he says modern investment theory, he's likely talking about MPT. the problem is there is no one agreed upon theory of modern portfolio construction. So I usually say thing like this:

"how do you define modern portfolio theory?"

"burton Malkiel says we should have a linear combination of the broad market and govt bonds, Fama and French argue market indexes and corporate bonds, graham said buy value stocks and corporate bonds, which one do you adhere too? or is there some other definition considering there are like hundreds?"

"Benoit Mandelbrot has shown that Market returns do not follow a normal distribution and MPT ignores the tales of distributions, how does your definition deal with this?"

almost every purported solution is hold stocks and bonds. you do that in the most cost efficient way. could you be holding more risk than I have an appetite for? WHO KNOWS...empower financial consultant probably doesn't, and their risk assessment will barely get me there either.
The intrepid "advisor" could have mentioned leverage and portfolio construction using long/short methods... isn't that all the academic rage these days (or since 1970 or so?)? Instead that esteemed personage seems to only have been interested in hassling the OP.
you could do a 3x leveraged sp500 fund and very heavy bond portfolio and get some level of risk/return ratio that mimic a non leveraged heavy equity one. and then even if you add commodities, gold, reits, to a equity/bond portfolio, even a 15% allocation to each one correlate pretty heavily over a long period of time to a equity/bond portfolio. in both returns and risk.
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Random Musings
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Re: Memoir of my Empower "Financial Advisor" call

Post by Random Musings »

Good for the OP to stick with their investment plan. With respect to the 0.89% annual fee, my question (on the bond side) would be "if a ten year Treasury bond is paying 4.45% right now, why would I want to give 20% of that yield to you? And I'm certainly not going to hand over a chunk of my bond mutual fund dividends to you either".

RM
I figure the odds be fifty-fifty I just might have something to say. FZ
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